Bullish gold wagers surged last week

Individuals who purchase precious metals might be interested in knowing that the bullish gold wagers of major speculators surged during the week that ended on September 24.

These people might benefit from knowing such information since it can give them a better sense of the future direction of the market for gold.

Data provided by the U.S. Commodity Futures Trading Commission revealed that during the week ending on September 24, there was a 12 percent spike in the net length on gold bullion, according to Bloomberg. A major contributor to this change was a sharp decline in short positions, which plunged 17 percent during the week.

One reason that these individuals may be so bullish right now is the recent decision made by the Federal Reserve to refrain from tapering quantitative easing at the September policy meeting. This move surprised people across the world, as the Federal Open Market Committee was widely expected to start moving this stimulus lower in September.

“The Fed has made it clear that the economy is weak, and the stimulus spigot will be open full-bore,” John Stephenson, who works for Toronto-based First Asset Investment Management Inc., told the news source “That means they’re continuing to inject more into the money supply, and that is a bullish argument for gold.”